Favorite 50 (2009)

Floating Widget

Floating Share Widget

SHARE

Amazon.com tops the annual STORES Favorite 50 online retailers list, followed closely by Wal-Mart, eBay, Best Buy and J.C. Penney Company. If the top five seem oddly familiar, you’re right; they’re the same merchants that ranked highest on this exclusive list a year ago.

Each continues to grab its share of headlines. Within the last two months Amazon “hooked up” with Zappos.com, then “broke up” with Target. eBay partnered with General Motors for a limited-time promotion that allowed California potential buyers to negotiate the purchase of a new car or truck from their sofas instead of the local showroom.

But the real news in STORES’ third annual ranking of consumers’ favorite online retailers isn’t necessarily about the list’s leaders: it’s about a palpable shift in the mindset of shoppers. Loyalty is taking a back seat to price, and shoppers are becoming agnostic about retail channels. Nowhere is that more apparent than in the first-time entry of Craigslist.org.

Craigslist, which debuts at No. 25, cut its teeth as a web-based provider of free classified advertisements but has evolved into a centralized network of online communities. Industry gurus wouldn’t characterize Craigslist as a retailer. Yet when BIGresearch polled more than 8,600 consumers in June, asking them which websites they shop most often for apparel and non-apparel items, the San Francisco-based company bested its well-known neighbor Gap (No. 28) and customer-favorite Zappos.com (No. 38).

Purists may wince at the thought of Craigslist being perceived as an online retailer, but they’d also have to acknowledge that industry graveyards are littered with the bones of those who tried to dictate to shoppers rather than listen to them. Most are willing to concede that it may be time to once again tweak the definition of retailing.

“For a growing number of shoppers it’s not about the retail channel or the nameplate over the door — It’s about getting the best price, wherever they can find it,” says Wendy Liebmann, CEO of WSL Strategic Retail. “After years of buying and selling on eBay.com and similar sites, shoppers are comfortable bypassing traditional channels and buying something from a seller a few towns away.”

Current economic challenges, she says, “have profoundly changed shoppers and have made them more willing to find new, smarter options. The same person who grimaced at a garage sale 18 months ago is now willing to buy a gently used coffee table from someone 40 miles away – and for the privilege of buying it, he’s willing to pay cash and drive there to pick it up. They don’t feel badly about it or compromised in any way.”

There can be no doubt that part of Craigslist’s popularity among online consumers is closely tied to the new economy. It provides those who need to raise cash quickly with a free platform to sell and a wide audience. And, for those still spending, Craigslist represents an alternative channel that’s both a throwback to the way consumers once acquired most goods (bartering or buying from a neighbor) and a business model suited to the sustainable sensibilities of today’s shoppers and their new-found obsession with social networking.

The Favorite 50 also yields additional clues as to just how capricious the online consumer can be. A year ago, Costco ranked 26th on the chart, Kmart 34th. This year, it’s as if the two switched positions: Kmart climbed to No. 23, while Costco slipped to No. 36.

From the online shopper’s point of view, it’s likely that Costco’s more upscale web strategy has caused consumers to switch their allegiance – and more of their spending – back to the store. Living paycheck to paycheck is a sobering reminder of the need to stretch every dollar. With improved assortments and an easy-to-navigate website, Kmart provides a value-oriented option.

Other retailers that seemed to curry more favor among online shoppers in 2009 include women’s plus-sized retailer WomanWithin.com which jumped from 29th to 21st; No. 32 Chadwick’s, a specialty apparel shop with a value-oriented price structure that placed 40th last year; and HSN.com, which rose 12 spots to No. 34.